SAMI Vs. STATE OF KERALA

JUDGEMENT

(1.) In all these writ petitions, the one common question that arises for consideration is as to whether, without taking possession of the secured asset symbolically or actually by the bank in proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, the borrower or anybody aggrieved by the action of the bank can file an application/appeal under section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The petitioners in these writ petitions are persons against whose properties, proceedings under Sec. 14 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 have been initiated. Their grievance is that the Debt Recovery Tribunal is not entertaining applications/appeals despite the Banks initiating action to take possession through the Magistrate, which is a measure under Sec. 13(4) of the Act. The Debt Recovery Tribunal themselves have issued a circular, which is produced as Ext. P-5 in W.P(C) No. 17843/11, which reads thus:

(2.) In all these writ petitions, the petitioners have not been served with any notice of possession and possession has not actually or symbolically been taken by the banks concerned. The banks have straight away approached the concerned Chief Judicial Magistrate or Additional District Magistrate, having jurisdiction under Sec. 14 of the Act for assistance to take possession of the respective security asset. Some of these petitioners have tried filing an application under Sec. 17 of the Act before the Debt Recovery Tribunal, Ernakulam. But, the registry of the Debt Recovery Tribunal refused to entertain the same on the ground that unless possession has been taken, the appeal under Sec. 17 is not maintainable. According to the petitioners, the same is totally wrong, insofar as the very action of filing an application before the Chief Judicial Magistrate or the Additional District Magistrate for assistance to take possession of the secured asset, is a measure under Sec. 13(4), against which the application under Sec. 17 of the Act would lie before the Debt Recovery Tribunal. Therefore, the refusal on the part of the Debt Recovery Tribunal to entertain application under Sec. 17 on the ground that unless possession is taken by the financial institutions, no application under Sec. 17 would lie, is totally arbitrary and unsustainable, is the contention of the petitioners.

(3.) The learned counsel for the banks would vehemently contend that unless possession is taken, no appeal or application under Sec. 17 would lie. Counsel for the Union Bank of India would contend that, that is exactly the law declared by the Supreme Court of India. Counsel for the bank refers me to the decisions of the Supreme Court on the subject, namely, Mardia Chemicals Ltd. Vs. Union of India, (2004) 4 SCC 311 and then Transcore Vs. Union of India, (2008) 1 SCC 125. According to him , those decisions are authorities for the proposition that no appeal would lie under Sec. 17 unless and until possession is taken by virtue of the provisions contained in Sec. 13(4). He points out that the first measure contemplated under Sec. 13(4) is taking possession itself and consequently, unless and until possession is taken, no appeal under Sec. 17 would lie, which is what has been stated in the Mardia Chemicals & Transcore decisions (supra). He would also take me to the decision of the Division Bench of this court in Muhammed Ashraf Vs. Union of India, 2008(4) KLT 1 , wherein, this court has held that against an order under Sec. 14 of the Act, no appeal would lie before the Debt Recovery Tribunal under Sec. 17, which would go to show that unless possession is taken under Sec. 13(4), no appeal would lie.